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ChexSystems Score: 13 Facts you should know about banking history



What’s your Chexsystems Consumer Score? More importantly, did you know you had a Chexsystems Consumer Score? ChexSystems is a consumer reporting agency just like Experian, Equifax and Transunion.

And, just like the three major consumer reporting agencies, they produce a score based on the information contained in your ChexSystems file. But there’s a catch with ChexSystems, they only contain negative information unlike a credit report, which establishes a history of good and bad behavior.

ChexSystems is meant to determine if someone should be given a checking account at a bank or credit union.

What’s in a ChexSystems Score – 13 Facts to know about banking history

A ChexSystems Consumer Score can range from 100 to 899. The higher the score, the lower the risk to a potential bank, credit union, lender or credit card company. The ChexSystems Score is based on the information reported to ChexSystems. Your overall credit and debit history is contained in your ChexSystems file.

The following is in no way complete but it does contain some of the types of information found in a ChexSystems file:

  • Delinquent or derogatory credit behavior.
  • Delinquent or derogatory credit behavior on installment trades.
  • Previous debit inquiry history.
  • Delinquent or derogatory credit behavior on trades opened last 24 months.
  • Paid and Unpaid insufficient fund items (“NSF”).
  • Excessive “NSF” charges, even though you may have covered all of those charges.
  • Checking account habits that your bank may consider negative.
  • Any kind of Fraud.
  • Uncollected overdrafts, ATM transactions or automatic payments the bank paid.
  • Abuse of Debit Card, Savings Account or ATM Card.
  • Violation of any banking rules and regulations.
  • Opening an account with false information.
  • Excessive ChexSystems Inquiries.

If you have no negative banking history, you may not have a ChexSystems score. That’s because ChexSystems bases its ChexSystems score on negative banking habits.

What companies use ChexSystems Consumer Scores

Banks, credit unions, other financial institutions, and even some credit card companies use a ChexSystems score to help determine whether they should extend a bank account or credit to you. Potential banks, lenders, financial institutions, and credit card companies use your ChexSystems report and score to see how you managed past credit obligations; and, if they are able to extend credit to you, the ChexSystems report and score help to determine the credit terms. Banks that don’t use ChexSystems may use Early Warning Service or a credit report to determine eligibility.

How to order your ChexSystems Consumer Score

Because ChexSystems is a consumer reporting agency, it is governed by the federal Fair Credit Reporting Act (FCRA). In addition to promoting accuracy, fairness, and privacy of information in the files of consumer reporting agencies, the FCRA gives you the right to request your credit score.

You can check your ChexSystems Consumer Score; or, if you have been denied a bank account or other product based on your ChexSystems score, that company may send you a letter containing your score. Additionally, if you are denied because of adverse information you are entitled to a free copy of your ChexSystems report if requested within 60 days of the denial.

A ChexSystems Consumer Score is free of charge but you must complete a ChexSystems request form and submit it by mail or fax.

Can a ChexSystems Score be Improved?

The short answer is yes. But approaching the issue of improving your ChexSystems consumer score should be focused on eliminating banking habits and behavior that may be lowering your score. For instance, if you have frequent overdrafts work on balancing your account to avoid overdrafts or maintain an overdraft protection account.

If you receive a denial letter based on ChexSystems it will include key factors affecting your score. Review the key factors as these are the main elements lowering your score. You have the right to dispute inaccurate, erroneous, and outdated information in ChexSystems. Information in ChexSystems can remain for 5 years.

How to Improve Your ChexSystems Score

Here are a few more actions that may help improve your ChexSystems Score.

  • Stop bouncing checks.
  • Don’t overdraft your account – set up overdraft protection.
  • Don’t open or close bank accounts too often.
  • Don’t engage in any fraudulent or suspected fraudulent behavior.
  • Don’t close accounts that have a negative balance.
  • Pay any debt owed to the bank.
  • If you have paid a charged-off debt request the bank update the debt to paid or delete it.
  • Next, focus on addressing the negative remarks on your report which could be dragging our score down.
  • If you’ve got a negative balance, for example, pay off anything you owe to the bank to clear the debt.

Consider Second Banking If You’ve Been Denied

Second chance banking offers checking accounts that are designed for people who have a negative banking history. These accounts are meant to give you a fresh start with banking.

Many credit unions offer second chance checking accounts along with some major banks. Most financial institutions with second chance checking have a monthly service fee on accounts. When choosing, compare the fees and features for each account to see which offers fit your financial needs.

Dispute errors in ChexSystems

ChexSystems must investigate disputes the same as credit bureaus because they are a consumer reporting agency. Dispute rules under the FCRA apply with ChexSystems. If you find errors or mistakes submit a dispute.

Consumers have the right to dispute errors with both ChexSystems and with the bank or credit union who supplied that information. ChexSystems must work with the banks to investigate consumers’ disputes of inaccurate information on their reports.

If errors are discovered, they are required to update that information. Keep in mind that it can take up to 30 days for this to be completed. If ChexSystems or the bank is unable to verify the information, it must be deleted.

2 thoughts on “ChexSystems Score: 13 Facts you should know about banking history”

  1. doug donato demartini

    What do you do if you disputed something by certified mail and its been 32 days and haven’t heard anything from Chexsystems? Is it time to send a letter stating you demand the item removed? What should all be said in a demand to remove the item?

    1. Since you have exact dates the dispute was mailed (good move sending certified), I would make a complaint with the Consumer Financial Protection Bureau. Simply state you disputed an item on a specific date, you have documentation of when you mailed the dispute to ChexSystems but ChexSystems failed to reply. ChexSystems did not comply within the FCRA investigation time periods and they are in violation. The RESOLUTION you seek is DELETION of that item.

      Keep in mind though that a furnisher of information (ChexSystems) has 30 days to investigate (which can be extended up to 45 days if you send additional information during this period) and must inform you of the results within five business days of completion.

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